SEATTLE
— It's a rare sunny day here, which means Green Lake, nestled on the eastern edge of the Woodland Park Zoo, teems with thousands of fitness buffs - and their dogs - who run, pedal, and skate around the two-lane 2.8-mile path edging this city's No. 1 fitness magnet.

Staying healthy or becoming healthier is as much a part of the Pacific Northwest lifestyle as steaming mugs and good raingear. In fact, Men's Fitness magazine named Seattle America's "fittest city" this year. No surprise, then, that King County, which includes Seattle, has decided to manage its ongoing budget crisis by leveraging the healthy habits of its employees to keep insurance costs down.

The private sector across the country has already been experimenting with healthy incentives for employees with anything from rebates for gym memberships to insurance deductibles for nonsmokers. Lately, the wellness trend has been expanding to state and county governments as mounting healthcare costs drain budgets.

In Florida, Bradenton County recently announced that county employees who continue to smoke next year will have to pay higher insurance deductibles. And on the state level, Gov. Jeb Bush approved a rule that forces most private insurers to send rebate checks to employers when their workers can prove they have adopted healthier lifestyles.

King County is the latest to follow suit by offering its 13,000 employees the opportunity to lower their healthcare premiums by running laps and forgoing french fries.

With healthcare costs here rising about 12 percent annually, King County calculated that tax dollars spent on employee health benefits would double in six years. Its budget belt was already cinched snug, and ever-ballooning expenses for health insurance would mean more cuts to vital county programs.

Conventional solutions - shifting healthcare costs to employees or weakening insurance coverage - were anathema to County Executive Ron Sims, a Democrat with strong support from organized labor.

So, with those options off the table, county planners and consultants were forced to think creatively.

Ironically, it was Mr. Sims' ultra- liberal principles that led ultimately to the application of market forces, the holy grail of conservative Republicans. Echoing a favorite mantra of President Bush, Sims says he expects the county can save about $40 million over three years - as employees accept "ownership" of their healthcare costs.

Here's how the plan will work: All county employees will be given the choice - participate or don't. Those who ignore the program will see their co-pays, deductibles, and co-insurance rates rise to the most expensive of three pricing tiers.

Employees who participate will score points for a variety of activities and lifestyle choices. More points translate into lower out-of-pocket costs. Initially, participants will meet with a physician and, together, develop a health assessment along with personal goals.

The assessment might include such goals as increased exercise, eating more fruits and vegetables, or cutting back on alcohol consumption. Individual health assessments will never be seen by county overseers, but will instead be passed along to a third party agency, which will monitor employee participation and progress. The agency will protect employees' privacy, telling the county only whether an employee is participating.

Participants can score points for healthy behaviors - wearing seat belts, attempting to quit smoking, or wearing motorcycle helmets - and the county will provide online advice and even coaches to help participants take steps toward better health. At each year's end, employees will receive a report card that determines how much they will pay.

In a city that would rather be outdoors, the plan could have broad appeal. Andrea Gray, an elementary school teacher who has just finished jogging around Green Lake with her husband Erik Van Hagen and their black mutt Betty, thinks Seattle is good place to adopt the healthcare initiative.

"All of my friends work out on a regular basis - whether it's yoga, climbing, ultimate Frisbee, or jogging. I think there's sort of a Northwest culture that encourages it."

Even for those less athletically inclined, Caroline Whalen, a deputy administrative officer for the county, points out that those dealing with chronic conditions will not be penalized.

Employees' health doesn't actually have to improve; they just have to make efforts to get healthier. Sims estimates an employee who earned enough points to quality for the gold tier - which confers the lowest costs - could save up to $1,600 a year, and a participating family in the gold tier could save up to $2,400.

Not everyone thinks the plan is equitable. Critics of similar programs feel it's an unnecessary intrusion by employers into the lives of their employees and some feel participants could be tempted to stretch the truth to earn the points.

"It just seems, on its face, unfair to the average county employee," says Tim Miller, an accountant for the county. "I mean, what if somebody lies [on their health assessment form] about exercising? How can you tell?"

Dwight Pelz, a member of the King County Council sees it differently. "It's not, 'If you're a smoker you get penalized.' " he says. It's a little bit of George Bush's idea of personal responsibility. You're encouraged to do a few things to take care of yourself - and if you do you'll save some money. I don't think it's intrusive at all."

Some 92 percent of county employees belong to labor unions, and all but one have signed on to the program, which covers contracts from January 2007 to the end of 2009. The unions realized the plan could preserve jobs and keep insurance coverage from deteriorating.

"Look," Sims says, "If you buy a car, you're limited by your income. If you buy a house, you're limited by your income. But with healthcare, it's as if everyone's been given a credit card with no spending limits and you can buy as much as you want. There's no way to control costs. That's just not a mature approach."

To county employees, he preaches, "Stay fit. Own the decision. Realize there are consequences." He is convinced they will indeed make better choices, and that their prudence will save taxpayers money. "All we need," he concludes, "is to inject the free market into this."